On Monday I looked at three ASX shares that have been given buy ratings by leading brokers this week.
Unfortunately, not all shares are in favour with brokers right now. The three shares listed below have all just been given sell ratings. Here’s why they are bearish on them:
Commonwealth Bank of Australia (ASX: CBA)
According to a note out of Goldman Sachs, its analysts have retained their sell rating and $74.58 price target on this banking giant’s shares. The broker believes that CBA’s strong deposit franchise leaves it more vulnerable to lower rates. Especially given the broker’s expectation that the Reserve Bank will cut the cash rate in November. Goldman also notes that CBA has the highest exposure to more competitive mortgages. Overall, it feels it is expensive on both relative and absolute terms. The CBA share price is currently changing hands at $80.29.
Costa Group Holdings Ltd (ASX: CGC)
A note out of the Macquarie equities desk reveals that its analysts have downgraded this horticulture company’s shares to an underperform rating and slashed the price target on them to $2.51. According to the note, Macquarie made the move in response to Costa’s fourth earnings downgrade of the year. It also notes that earnings visibility remains limited and appears concerned that its guidance for next year may be too optimistic. Costa’s shares are still suspended but last traded at $3.46.
Sims Metal Management Ltd (ASX: SGM)
Analysts at UBS have retained their sell rating and cut the price target on this scrap metal company’s shares to $8.05. According to the note, the broker cut its price target following Sims’ disappointing trading update on Monday. That update revealed that tough market conditions mean Sims expects to post a first half EBIT loss of up to $30 million. Although UBS feels there are signs that things are stabilising, it remains too soon to change its rating. Especially given the downside risks to its earnings in the second half. The Sims share price is trading at $9.67 this afternoon.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.